401(k) Plan Cost Calculator: The Impact of the SECURE Act
How much will a 401(k) plan cost your business? Could starting a retirement plan qualify you for tax incentives? Use this calculator to learn what offering a Human Interest 401(k) might cost your company after accounting for tax credits.
Eligible employees include W2 employees who meet service and age requirements of the plan.
An HCE (or highly compensated employee) is defined by the IRS as an employee who earned more than $130,000 in 2020 (or 2021), or someone with 5%+ ownership in the company.
Not sure which is right for you? Refer to our Pricing page for more information about our different 401(k) packages.
Choosing to auto-enroll your employees in the 401(k) plan can open up the opportunity to qualify for another tax credit. Read more about auto-enrollment on our blog.
|Human Interest 401(k) Plan Cost||$811.00||$811.00||$1,872.00|
|Base Service Fee||$300.00|
|Per Employee Fee||$12.00|
|One-time Setup Fee||$499.00|
|Base Service Fee||$300.00||$300.00||$1,800.00|
|Per Employee Fee||$12.00||$12.00||$72.00|
|One-time Setup Fee||$499.00||$499.00||$0.00|
|SECURE Act Tax Credit for Retirement Plan||-$405.50|
|SECURE Act Tax Credit for Auto-enrollment||-$500.00|
|Estimated Tax Savings (25%) based on average effective tax rate for small businesses||$23.63|
|SECURE Act Tax Credit for Retirement Plan||-$405.50||-$405.50||-$500.00|
|SECURE Act Tax Credit for Auto-enrollment||-$500.00||-$500.00||-$500.00|
|Estimated Tax Savings (25%) based on average effective tax rate for small businesses||$23.63||$23.63||-$218.00|
|Estimated 401(k) Plan Cost|
After Tax Credits
Disclosures and Notes
- The 401(k) Plan Cost Calculator above is not tax or legal advice and is intended to estimate the cost of a Human Interest 401(k) plan, taking into account the tax credits available through the SECURE Act as well as on the average effective tax rate for small companies (25%).
- Cost calculations above assume a constant employee size, including HCEs and NHCEs, and that headcount doesn't exceed 100, in order to maintain eligibility for SECURE Act tax credits. 2021 costs are calculated based on the number of months remaining this year. Costs for subsequent years are based on 12 months of service.
- Costs above reflect the cost for an employer. In addition, there is a 0.50% investment management fee and custody fee and a 0.07% average fund fee for participants.
- Costs above do not include any special offer or promotion.
Learn more about 401(k) tax benefits
Small business 401(k) plans are more accessible than ever thanks to the Setting Every Community Up for Retirement Enhancement (SECURE) Act. Not only is a 401(k) employer match tax-deductible, there’s also a credit to offset costs associated with starting a plan.
The SECURE Act offers tax incentives for business owners starting their first 401(k) plan, including a $5,000 tax credit for three years that covers qualifying expenses such as setup and administrative tasks. Auto-enrollment provides an additional $500 tax credit and can help encourage employee participation.
Tax credits can add up to $16,500 and are available for three years. To qualify, your business must have less than 100 employees.
Want to learn more?
The Fundamentals of 401(k) Plans provides an overview of how plans work, including their associated costs.
Learn more about the top nine impacts the SECURE Act has on small businesses.
Read up on the tax implications of an employee match: Is a 401(k) Match Contribution Tax Deductible?